RENEWABLE ENERGY AND ENERGYRENEWABLE ENERGY AND ENERGY EFFICIENCY: ECONOMIC DRIVERS

FOR THE 21ST CENTURY

Presented at the Environmental andEnergy Study Institute Briefinggy y g

902 Hart Senate Office BuildingNovember 8, 2007

Roger H. Bezdek, Ph.D., PresidentManagement Information Services, Inc.

Washington, D.C.rbezdek@misi-net.com

WHAT IS CURRENT STATUS OF THE INDUSTRY?S CU S US O US“Prior to determining where we are going, we must determine from

whence we came.” – A. Lincoln

• Current size of RE&EE Industries is unknown• Any forecasts are meaningless unless we know what the size ofAny forecasts are meaningless unless we know what the size of

the industry is – or was in 2006• First, must estimate current size of EE&RE industries – this has

not been done before-- U.S.-- Ohio

• Then forecast industries growth to 2030• Then, forecast industries growth to 2030-- 3 scenarios-- U.S.

Ohio

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-- Ohio

U.S. RE & EE INDUSTRIES IN 2006U S & US S 006

I d t R Di t J b T t l (di t lIndustry Revenues

(billions) Direct Jobs(thousands)

Total (direct plus indirect) Jobs

Created(thousands)

Renewable Energy $39 2 194 446Renewable Energy $39.2 194 446Energy Efficiency 932.6 3,498 8,046 TOTAL $971.8 3,692 8,492 Source : Management Information Services, Inc. and American Solar Energy Society, 2007.

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Source : Management Information Services, Inc. and American Solar Energy Society, 2007.

U.S. RE INDUSTRY IN 2006

Industry Segment Revenues/Budgets (billions)

Direct Jobs

Total (direct plus indirect) Jobs Created

Wind $3.0 16,000 36,800 Photovoltaics 1.0 6,800 15,700 Solar Thermal 0.1 800 1,900Hydroelectric Power 4.0 8,000 19,000 Geothermal 2.0 9,000 21,000 Biomass Ethanol 6.3 67,000 154,000 Biodiesel 0.3 2,750 6,300

Bi P 17 0 66 000 152 000 Biomass Power 17.0 66,000 152,000Fuel Cells 0.9 4,800 11,100 Hydrogen 0.8 4,000 9,200 Total, Private Industry 35.4 185,150 427,000 Federal Government 0 5 800* 1 850Federal Government 0.5 800 1,850DOE Laboratories 1.8

3,600** 8,300

State and Local Government 0.9 2,500 5,750 Total Government 3.2 6,900 15,870 Trade and Professional Associations and NGOs

0.6 1,500 3,450

TOTAL, ALL SECTORS $39.2 193,550 446,320 *Includes Federal employees and direct support contractors.

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p y pp**Includes Federal employees, laboratory employees, and direct support contractors. Source : Management Information Services, Inc. and American Solar Energy Society, 2007.

U.S. EE INDUSTRY IN 2006

Industry Segment Revenues/ Budgets (billions)

Direct Jobs (thousands)

Total (direct plus indirect) Jobs

Created (thousands)

Insulation $5 26 60 ESCO 3 19 44Recycling 275 1,310 3,013 Vehicle manufacturing 73 165 380 Household appliances and lighting 22 86 198 Windows and doors 12 51 117 Computers, copies, and FAX machines 90 312 718 TV, Video, and Audio equipment 45 183 421HVAC systems 12 45 104 Industrial and related machinery 19 76 175 Miscellaneous durable manufacturing 105 389 894 Nondurable manufacturing 220 528 1,214 Utilities 2 14 32 C t ti 36 227 522Construction 36 227 522Total, Private Industry 919 3,431 7,892 Federal government EE spending 3.3 15 35 State government EE spending 3 28 64 Local government EE spending 2.3 21 48 T t l G t 8 6 64 147Total Government 8.6 64 147 EE Trade and Professional Associations and NGOs

0.5 3 7

TOTAL, ALL SECTORS $932.6 3,498 8,046

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Source : Management Information Services, Inc. and American Solar Energy Society, 2007.

ECONOMIC IMPACT OF RE&EE IS ENORMOUS

• 2006 RE&EE sales represent substantially more than the combined 2006 sales of the 3 largest U.S. corporations (Wal-Mart ExxonMobil & GM)Mart, ExxonMobil, & GM)

• RE&EE are growing more rapidly than U.S. average• Contain some of the most rapidly growing industries in the world,

h i d f l ll d bi f lsuch as wind, fuel cells, and biofuelsIn 2006 they generated annually:• Nearly a trillion dollars in industry sales• 8.5 million new jobs• More than $100 billion in industry profits• More than $150 billion in increased federal, state, and localMore than $150 billion in increased federal, state, and local

government tax revenues• Stimulus to the U.S. manufacturing industry• Significant displacement of imported oil

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• Significant displacement of imported oil• Reduction in the U.S. trade deficit

EE&RE OCCUPATIONS: WAGES, EDUCATIONAL REQUIREMENTS, AND GROWTH FORECASTSREQUIREMENTS, AND GROWTH FORECASTS

(Selected Occupations)

Occupation 10 year % Growth

Median Salary

% With Bachelor’s

Education

Forecast DegreeMaterials Scientists 8 $74,400 94 Bachelor’s Physicists 7 91,500 92 Doctoral Microbiologists 17 63,400 96 Doctoral Biological Technicians 17 36,500 60 Associate Conservation Scientists 6 53,800 88 Bachelor’s Chemists 7 63,500 94 Bachelor’sChemists 7 63,500 94 Bachelor sChemical Technicians 4 40,100 27 Associate Geoscientists 6 73,200 94 Doctoral Natural Science Managers 14 99,100 90 Bachelor’s Environmental Eng. Technicians 24 42,000 18 Associate Soil and Plant Scientists 20 58,000 64 Bachelor’s Mechanical Eng. Technicians 12 46,500 18 Associate Environmental Sci Technicians 16 38 500 47 AssociateEnvironmental Sci. Technicians 16 38,500 47 AssociateBiomedical Engineers 31 75,400 60 Bachelor’s Chemical Engineers 11 79,200 92 Bachelor’s Mechanical Engineers 10 77,000 88 Bachelor’s Electrical Engineers 12 76,000 83 Bachelor’s Environmental Engineers 14 74,500 82 Bachelor’s Computer Scientists 26 94,000 67 Doctoral Life & Physical Sci. Technicians 20 45,200 50 AssociateUtility Plant Operatives 4 53,000 10 OJT HVAC Technicians 12 37,600 14 OJT Energy Audit Specialists 18 39,500 18 OJT Forest & Conservation Workers 6 27,000 8 OJT Refuse & Recycling Workers 5 26,000 2 OJT Insulation Workers 6 $30,200 2 OJT

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$ , Source: Management Information Services, Inc. and U.S. Bureau of Labor Statistics, 2007.

TYPICAL EMPLOYEE PROFILE OF A 250-PERSON WIND TURBINE MFG COMPANY, 2006,

(Selected Occupations)

Occupation Employees Earnings Engine and Other Machine Assemblers 31 $36,300 Machinists 27 40 500Machinists 27 40,500Team Assemblers 16 30,100 Computer-Controlled Machine Tool Operators 12 40,600 Mechanical Engineers 10 71,600 First-Line Supervisors/Managers of Production 10 59,600 Inspectors, Testers, Sorters, and Samplers 8 40,400p pLathe and Turning Machine Tool Operators 6 40,000 Drilling and Boring Machine Tool Operators 4 39,800 Welders, Cutters, Solderers, and Brazers 4 39,900 Laborers and Freight, Stock, and Material Movers 4 29,800 Maintenance and Repair Workers 4 44,100 Tool and Die Makers 4 43 600Tool and Die Makers 4 43,600Grinding/Polishing/Buffing Machine Tool Operators 4 34,800 Multiple Machine Tool Operators 4 40,800 Industrial Engineers 3 70,400 Industrial Machinery Mechanics 3 46,000 Purchasing Agents 3 56,200g gEngineering Managers 3 108,300 Shipping, Receiving, and Traffic Clerks 3 32,100 Accountants and Auditors 2 59,800 Executive Secretaries and Administrative Assistants 2 43,200 Electricians 2 49,600 Mechanical Engineering Technicians 2 50 900

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Mechanical Engineering Technicians 2 50,900Janitors and Cleaners 2 29,800 Source: Management Information Services, Inc., 2007.

THREE FORECAST SCENARIOS FOR 2030THE BASE CASE:

-- Is essentially a “business as usual” case scenario that assumes no change in policyassumes no change in policy

-- We use the base case as a comparison against the two alternative scenarios

THE ADVANCED SCENARIO:THE ADVANCED SCENARIO:-- “pushes the envelope” on RE&EE industry possible from

current or impending technologiesRepresents a dramatic indication of what would be-- Represents a dramatic indication of what would be possible under an aggressive renewable energy scenario

THE MODERATE SCENARIO:A th t i d t i t l ( b th b-- Assumes that various moderate, incremental (above the base case) Federal and state RE&EE initiatives are put in place over next two decadesBased on various “mid range” estimates incorporating

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-- Based on various mid-range estimates, incorporating modest initiatives

THE U.S. RE & EE INDUSTRIES IN 2030U S & US S 030

Revenues (Billions of 2006 Dollars)

Total Jobs Created (Direct Plus Indirect – Thousands)

Base Case Moderate Scenario

Aggressive Scenario

Base Case

Moderate Scenario

Aggressive Scenario

RE $95 $227 $597 1 305 3 138 7 935RE $95 $227 $597 1,305 3,138 7,935EE 1,818 2,152 3,933 14,953 17,825 32,185 Total $1 913 $2 379 $4 530 16 258 20 963 40 120Total $1,913 $2,379 $4,530 16,258 20,963 40,120

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The U.S RE INDUSTRY IN 2030(SELECTED TECHNOLOGIES)( )

160

180

120

140

llars

80

100

on 2

006

Do

40

60Bill

io

0

20

11

Wind Solar Thermal PV Geothermal Ethanol BiomassPower

Base Case Moderate Scenario Advanced Scenario

U.S. JOBS CREATED BY RE IN 2030(TOTAL JOBS CREATED -- SELECTED TECHNOLOGIES)(TOTAL JOBS CREATED SELECTED TECHNOLOGIES)

2.5

2

s)

1

1.5

obs

(Mill

ions

0.5

1Jo

0Wind Solar Thermal PV Geothermal Ethanol Biomass

12

Power

Base Case Moderate Scenario Advanced Scenario

U.S. JOBS CREATED BY RE IN 2030(TOTAL JOBS CREATED SELECTED OCCUPATIONS)(TOTAL JOBS CREATED -- SELECTED OCCUPATIONS)

100

80

ands)

40

60

Jobs  (T

housa

0

20

13Base Case Advanced Scenario

EE&RE IMPACT IN OHIO& C O O

EE&RE INDUSTRIES IN OHIO, 2006 Industry Revenues

(millions) Direct Jobs

Total (direct plus

indirect) Jobs Created

,

Created Renewable Energy $785 2,880 6,615 Energ Efficienc 50 120 205 780 496 535Energy Efficiency 50,120 205,780 496,535 TOTAL $50,905 208,660 503,150 S M t I f ti S i I d A i S l E S i t 2007Source : Management Information Services, Inc. and American Solar Energy Society, 2007.

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RE INDUSTRY IN OHIO, 2006

Industry Segment Revenues/Budgets (millions)

Direct Jobs

Total (direct plus indirect) Jobs Created

Wind $250 740 1,700Photovoltaics 25 200 460 Solar Thermal 1 10 20 Hydroelectric Power 120 200 460 Geothermal 112 550 1,270,Biomass Ethanol 30 200 460 Biodiesel 12 80 180 Biomass Power 125 370 850 Fuel Cells and Hydrogen 80 450 1 030Fuel Cells and Hydrogen 80 450 1,030Total, Private Industry 755 2,800 6,430 Federal Government 6 20 45 State and Local Government 4 10 25 Total Government 10 30 70Total Government 10 30 70 Trade/Professional Associations & NGOs 20 50 115 TOTAL, ALL SECTORS $785 2,880 6,615

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Source : Management Information Services, Inc. and American Solar Energy Society, 2007.

EE INDUSTRY IN OHIO, 2006

Industry Segment Revenues/Budgets (millions)

Direct Jobs

Total (direct plus indirect) Jobs

Created Insulation $220 1,100 2,500 ESCO 130 630 1 450ESCO 130 630 1,450Recycling 18,500 97,300 224,000 Vehicle manufacturing 2,870 24,800 57,100 Household appliances and lighting 1,830 8,650 19,900 Windows and doors 550 3,020 6,900 Computers copies and FAX machines 1 100 5 650 13 000Computers, copies, and FAX machines 1,100 5,650 13,000TV, Video, and Audio equipment 4,360 14,820 34,100 HVAC systems 510 2,650 6,100 Industrial and related machinery 1,150 5,060 11,640 Miscellaneous durable manufacturing 7,240 25,300 58,200 Nondurable manufacturing 10,120 18,300 42,100 Utilities 18 220 500 Construction 1,110 7,720 17,750 Total, Private Industry 49,700 205,220 495,240 Federal government EE spending 5 20 45 St t d l l t EE di 15 40 100State and local government EE spending 15 40 100Total Government 20 60 145 Trade/Professional Associations & NGOs $400 500 1,150 TOTAL ALL SECTORS $50 120 205 780 496 535

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TOTAL, ALL SECTORS $50,120 205,780 496,535Source : Management Information Services, Inc. and American Solar Energy Society, 2007.

EE&RE FIRMS IN OHIO& S O O

We conducted a survey of existing EE&RE companies in Ohio, examining a functional, technological, and geographic mix of companies. Our research revealed a wide range of firms, and they:

• Are located throughout the state, in major urban centers, suburbs, small towns, and rural areas.

• Range in size from small firms of several employees to large firms employing hundreds

• Are engaged a wide variety of activities, including manufacturing, engineering, R&D, installation, monitoring, analysis, etc.

• Include some of the most sophisticated, innovative, high-tech firms in the state

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EE&RE FIRMS IN OHIO(Examples of Selected Firms)(Examples of Selected Firms)

Company Sector Location Company Sector Location

Advanced Hydro Solutions RE Fairlawn North Coast Wind & Power RE Port Clinton A i A F l RE D fi N C t l C EE Cl l dAmerican Ag Fuels RE Defiance Novar Controls Corp. EE ClevelandAMTEK Solid State Controls EE Columbus O’Brock Windmill Distributors RE North Benton CybetUtility RE Cleveland Ohio Windmill Mfg. Co. RE Berlin Center Dovetail Solar & Wind RE Glouster Owens Corning EE Toledo Energy Technologies, Inc. EE Mansfield Renewable Lubricants, Inc. RE Hartville EXTOL of Ohio EE Norwalk Repower Solutions EE ClevelandpEye Lighting International EE Mentor Schward Electrical RE Dayton Energy Technologies, Inc. EE Mansfield SCI Engineered Materials RE Columbus Essential Research, Inc. EE&RE Cleveland Solar Creations RE Perrysville First Solar RE Perrysburg Special Materials Research EE Strongsville Forry, Inc. EE Chagrin Falls SSOE Systems, Inc. EE Toledo G di T EE S l St E P d t EE D tGardiner Trane EE Solon Staco Energy Products EE DaytonJames Leffel & Company RE Springfield SunLight Energy Systems RE North Lawrence Jatro Diesel RE Mason Sunpower, Inc. RE&EE Athens Joe Mescan Windmill RE Columbia Station Technology Bus. Development RE North Ridgeville Liquid Resources of Ohio RE Medina Teron Lighting, Inc. EE Fairfield M&B’s Battery Company RE&EE Harrison The Enterprise Corp. EE TwinsburgM&B s Battery Company RE&EE Harrison The Enterprise Corp. EE TwinsburgMalcolm Pirnie EE Akron Third Sun Solar & Wind Power RE Athens Michael Byrne Mfg. Co. EE Mansfield Universal Electric Power RE Akron Mariner Energy Systems EE Brunswick Vanner, Inc. EE Hilliard Midwest Mechanical Power RE&EE Plain City Venture Lighting EE Solon National Electric Coil EE Columbus S M t I f ti S i I d G E Ohi 2007

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Source: Management Information Services, Inc. and Green Energy Ohio, 2007.

EXAMPLES OF EE&RE FIRMS IN OHIO (Characteristics of Selected Firms)(Characteristics of Selected Firms)

Company Sector Products & Services Location RE/EE Jobs

in Ohioin OhioAmerican Ag Fuels RE Biodiesel manufacturing facility Defiance 11 CybetUtility, LLC RE Bio-diesel production Cleveland 5 Dovetail Solar & Wind RE Installer of solar and wind energy products Glouster 8 Dyson Corporation RE Manufacturer of components for wind energy Painesville 12Dyson Corporation RE Manufacturer of components for wind energy

systems Painesville 12

EXTOL of Ohio, Inc. EE Manufacturer and fabricator of thermal insulation systems

Norwalk 45

First Solar LLC RE Manufacturer of solar photovoltaic modules Perrysburg 150First Solar, LLC RE Manufacturer of solar photovoltaic modules Perrysburg 150Forry, Inc. EE Manufacturer of microprocessor and

electronic EE and environmental controls Chagrin Falls 120

Malcolm Pirnie EE EE and environmental engineering and lti

Columbus 150 consulting

Spero Electric Corporation EE Manufacturer of EE lighting systems Streetsboro 95 Venture Lighting EE Manufacturer of metal halide lighting systems Streetsboro 280 Wastequip EE Manufacturer and distributor of waste and Cleveland 10

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recycling equipmentSource: Management Information Services, Inc. and Green Energy Ohio, 2007.

OHIO EE&RE INDUSTRIES IN 2030O O & US S 030

Revenues

(Billi f 2006 D ll )Total Jobs Created

(Di t Pl I di t Th d )(Billions of 2006 Dollars) (Direct Plus Indirect – Thousands) Base Case Moderate

ScenarioAggressive

ScenarioBase Case

Moderate Scenario

Aggressive Scenario

RE $2.0 $5.7 $17.7 21 56 174 EE 96.7 114.7 202.6 964 1,150 2,096 Total $98 7 $120 4 $220 3 985 1 206 2 270Total $98.7 $120.4 $220.3 985 1,206 2,270

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RENEWABLE ENERGY CAN CREATE NEW JOBS IN OHIOCREATE NEW JOBS IN OHIO

60,000

40,000

50,000

30,000

Jobs

10,000

20,000

0Wind PV Geothermal Ethanol Biodiesel Biomass

PowerFuel Cells

&

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Power &Hydrogen

2006 2030 Advanced Scenario

OHIO JOBS CREATED BY RE IN 2030(TOTAL JOBS CREATED -- SELECTED OCCUPATIONS)

3000

2000

2500

1000

1500Jobs

0

500

0

22Base Case Advanced Scenario

EE&RE OFFER DEVELOPMENT OPPORTUNITIES FOR OHIOOPPORTUNITIES FOR OHIO

• Employment growth in EE&RE varies among sectors: Growing sectors include A&E, R&D, ESCO, environmental technologies, bio-fuels, power technologies industrial processes distributed generation computer controls &technologies, industrial processes, distributed generation, computer controls & systems, HVAC systems, and others

• EE&RE creates a variety of high-paying jobs, many of which take advantage of Ohio manufacturing skillsg g

• Ohio, with its traditional manufacturing economy, can recruit EE&RE companies to take advantage of its skilled workforces for wind turbine manufacturing, biofuels production, etc.

• Wages in many EE&RE sectors are higher than the U.S. average, and EE&RE requires a wide mix of occupations

• EE&RE occupations include many jobs that require associate’s degrees, on-the job training or trade certifications and which pay high wagesthe-job training, or trade certifications and which pay high wages

• Unlike some industries, EE&RE is a realistic target for job creation in Ohio: State & local communities can build clusters around industry sectors

• Many entrance points makes EE&RE market easier to penetrate if Ohio

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• Many entrance points makes EE&RE market easier to penetrate if Ohio can utilize its strengths in workforce, tech, mfg., R&D, education, etc.

RE&EE CREATE SKILLED, WELL-PAYING JOBS NOT SUBJECT TO FOREIGN OUTSOURCINGNOT SUBJECT TO FOREIGN OUTSOURCING

• RE&EE can create many jobs in two categories that Ohio is eagery j g gto attract and retain:

• 1. College-educated professional workers, many with advanceddegreesg

• 2. Highly skilled, technical workers, with advanced training andtechnical expertise, many of them in the manufacturing sector

• RE&EE thus generate jobs that are disproportionately for highlyRE&EE thus generate jobs that are disproportionately for highlyskilled, well-paid, technical and professional workers, who providethe foundation for entrepreneurship and economic growth. Theseare the high-skilled, high-wage, technical and professional jobsg , g g , p jthat all states and regions seek to attract

• Ohio is in competition with other states for these new energyeconomy jobs

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